When is an application to the First-tier Tribunal (FTT) for a determination of the entitlement to acquire the right to manage made under section 84(3) of the Commonhold and Leasehold Reform Act 2002 (the Act)?
In The Lough’s Property Management Ltd v Robert Court RTM Company Ltd [2019] UKUT 105 (LC); [2019] PLSCS 67, the respondent, Robert Court RTM Company Ltd, sought determination of its right to acquire the management of a residential building. Its legal representatives submitted a partially completed standard form RTM: Application relating to (No Fault) Right to Manage to the FTT on 1 June 2017.
The application was defective. Copies of the claim notice and the counter-notice were not included. The tick box indicating that the application was being made pursuant to section 84(3) of the Act had not been checked. Further, the application form failed to indicate the result that was being sought and the reasons for making the application in accordance with rule 26(2)(h) and (i) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 (the Rules). These defects were not rectified until after the two-month expiry period for making such applications.
The respondent argued that the application, although irregular, had been made in time for the purposes of section 84(3) of the Act. The absence of information and supporting documents was an irregularity which could be cured by the FTT applying rule 8(1) of the Rules. That rule prevented a failure to comply with any provision of the rules from voiding the proceedings before the FTT or any step taken in the proceedings. The FTT agreed.
The freeholder, The Lough’s Property Management Ltd, appealed. It argued that rule 8(1) could not be used to cure a defect in compliance with section 84(3) of the Act. The Upper Tribunal (Lands Chamber) (UT) agreed.
Relying on the High Court decision in Aldford House Freehold Ltd v Grosvenor (Mayfair) Estate and another [2018] EWHC 3430 (Ch); [2019] EGLR 10, the UT found that the Rules could not modify the requirements of the Act itself. The requirements under the Act were substantive and had to be complied with within the two-month time limit. The failure to do so resulted in the claim notice being deemed withdrawn in accordance with section 87(1)(a) of the Act.
The UT confirmed that rule 8 could be used to preserve an application made under section 84(3) of the Act when the defect was a failure to supply documents required by the FTT’s own practice direction; namely the claim notice and the counter-notice. Compliance with the practice direction was prescribed by the Rules and consequently the effect of non-compliance with the same could also be provided by the Rules.
On the issue of costs, in accordance with sections 88 and 89 of the Act, respondent would only have been liable for the freeholder’s costs up to the date the claim notice was deemed withdrawn.
Elizabeth Dwomoh is a barrister at Lamb Chambers
